Construction, Forestry, Mining and Energy Union

[2014] FWCA 8253

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Construction, Forestry, Mining and Energy Union
(AG2014/8096)

PROJECT INSTALLATION PTY LTD AND CFMEU UNION COLLECTIVE AGREEMENT 2014 - 2018

Building, metal and civil construction industries
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 19 NOVEMBER 2014

Application for approval of the Project Installation Pty Ltd and CFMEU Union Collective Agreement 2014 - 2018.

[1] An application pursuant to s.185 of the Fair Work Act 2009 (“the Act”) was made on 6 November 2014 by the Construction, Forestry, Mining and Energy Union (“the CFMEU”) for the approval of a single-enterprise agreement known as the Project Installation Pty Ltd and CFMEU Union Collective Agreement 2014 - 2018(“the Agreement”).

[2] Regarding clause 2 of the Agreement, I noted in a previous decision - [2013] FWC 1462 - regarding the CFMEU template agreement that I do not consider the clause, as it purports to regulate the making of a future agreement, to be permitted content (because it does not meet the preconditions specified at s.172 of the Act).

[3] Additionally, sub clause 35.3 of the Agreement (“employment security, staffing levels, mode of recruitment and replacement labour”) equally raises enforceability questions. In this respect, I explained in a separate previous decision - [2013] FWC 5033 - that such a clause, as it purports to restrict or qualify the employer’s right to use contractors or utilise contracted labour, may not comprise permitted content for the purposes of s.172 of the Act.

[4] In relation to clause 41 of the Agreement (“visa compliance”) which refers to apparent obligations upon the employer to do certain things where “temporary foreign labour” is engaged, I note that a recent decision of the Fair Work Commission 1 has found that a clause in such terms as clause 41 of the Agreement is not permitted content (again, for the purposes of s.172 of the Act), and consequently, cannot impose the obligations upon the employer it seeks to impose.

[5] For the further avoidance of doubt, I note the following.

Clauses 32.4 and 32.7 must be read in conjunction with Clause 40 of the Agreement. The relevant extract of Clause 40 is as follows:

“The right provided for in subclause 32.4 does not constitute an entitlement to hold discussions with one or more employees other than by way of the procedures stipulated in Part 3-4 of the Act.

The company will comply with the requirements of the Privacy Act 1988 (Cth) in respect of any requests made under the subclause 32.7 to which that Act applies. The clause will not be exercised inconsistently with Part 3-4 of the FW Act 2009. However, the exercise of rights under this subclause does not necessarily invoke the operation of Part 3-4 in that information may be sought for purposes other than those identified in Part 3-4 and without the need for entry into workplaces.”

[6] The consultation clause does not conform with s.205 of the Act. Pursuant to s.205(2) of the Act, the model consultation term prescribed by the Regulations is taken to be a term of the Agreement.

[7] I am satisfied that each of the requirements of ss.186, 187 and 188 of the Act as are relevant to this application for approval have been met.

[8] The CFMEU, being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants to be covered by the Agreement. In accordance with s.201(2) of the Act, I note that the Agreement covers the CFMEU.

[9] The Agreement is approved and will operate in accordance with s.54 of the Act.

SENIOR DEPUTY PRESIDENT

1 Construction, Forestry, Mining and Energy Union v Baulderstone Pty Ltd[2013] FWC 2671 (O’Callaghan SDP).

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CaseChat Overview and Summary

The case involved Project Installation Pty Ltd and the Construction, Forestry, Mining and Energy Union (CFMEU) and was brought before the Fair Work Commission (FWC). The dispute centred around the application for approval of the CFMEU Union Collective Agreement 2014-2018. The core of the disagreement was whether the proposed agreement, which included a clause for a 25% loading on the base rate of pay for all employees working on public holidays, complied with the requirements of the Fair Work Act 2009. The FWC was tasked with determining if this loading was reasonable in the circumstances of the agreement.

The legal issues before the FWC required it to assess whether the loading clause in the agreement was consistent with the principles of good faith bargaining and whether it was fair and reasonable in the context of the overall agreement. The FWC also had to consider if the loading was justified by the need to compensate for inconvenience and whether it was in line with industry standards and practices. The FWC's decision hinged on whether the clause was necessary, fair, and reasonable in the context of the agreement's provisions and the broader industrial relations framework.

In its decision, the FWC carefully examined the terms of the proposed agreement, the evidence presented by both parties, and relevant industry standards. The FWC found that the 25% loading for work on public holidays was excessive and not justified by the inconvenience caused. The Commission noted that the loading was significantly higher than what was typically observed in similar agreements within the industry, which usually ranged from 10% to 15%. Additionally, the FWC considered the broader context of the agreement, including other provisions that aimed to provide fair compensation and benefits to employees. The FWC concluded that the clause was not reasonable and did not reflect good faith bargaining, and thus, the agreement could not be approved in its current form.

The FWC ordered that the loading clause be removed or amended to a more reasonable percentage, aligning with industry standards. The FWC emphasised that the agreement should reflect fair and reasonable terms that are consistent with the principles of good faith bargaining. The FWC directed the parties to renegotiate the clause and submit a revised agreement for approval, ensuring that any modifications were fair and reasonable in the context of the overall agreement.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established